me out of this. connell: thank you very much. i am connell mcshane. dagen: i am dagen mcdowell. the financial giant says you should expect further declines in gold. connell: what happened to the dreamliner? they may have acted alone. the latest intelligence on the boston marathon bombing brothers. those stories straight ahead on markets now. ♪ connell: a pretty good rally in stocks right now is what we are seeing. dagen: let's go down to nicole petallides the 20 it is pretty

interesting. we got in some news from abroad but germany and japan, that was not too telling. this market is a market with momentum that move to the upside. we are bouncing back now. we have a stellar former like netflix and coach. the bulls out there say, hey, we will take it. connell: thank you. dagen: justice department producer that based on interactions with the hospitalized dzhokhar tsarnaev, they suspected that the two acted alone.

connell: but in that magazine -- joining us is a professor from nyu law. how about this intelligence that is coming out? >> it feels just right to me. fear right after 9/11 would be that they would be sleeper cells. the real threat comes from people who self radicalized. dagen: this is equally frightening, if not more frightening. the fbi was told by russia to look into the elder brother and we did not have a grasp.

>> absolutely right. we are already learning, just as you said, that there have been a couple evidence data points that were probably lost but authorities along the way. we are learning that some of the brothers attended and objected to the more mainstream peaceful message coming from the pulpit. connell: may be unfair, but at the same time, when you are here in new york at the local level in something similar came in, and about new york city, is there something that should have been done differently?

>> i will have to learn a lot more about what really happened in boston before i judge a situation there. authorities are caught in a very difficult situation. can you follow someone? are there operational concerns? if you are follow him, you are not following someone else. dagen: what do you think needs to change in terms of law enforcement, intelligence gathering, knowing what we know so far. >> i am reluctant to suggest structural change. say this, if we thought after 9/11 that we need to redouble our efforts, that having intelligence, including domestic intelligence, i think we need to

eventually double down that investment today. connell: this model, if you will , this type of terrorist, it is not something that you would watch very close here? >> american citizenship is no insulation ship against being burglarized. connell: he is a big motivator of these types of people. >> absolutely. he is someone who is the ideological bind the 2.0 version of alta. dagen: we were trying to book spencer.

we would put you both on together. goldman sachs closing its or position on gold. sandra: taking a look at gold prices. not giving a boost to gold prices right now. here is what goldman sachs is saying. they came out with a bit calling they believe gold prices will fall even further. now, they are saying we aren't out of the trade. however, they are laying in the very near term am a gold prices could fall further. they are doing around and they are bullish now.

they are saying gold has the potential to gain another 10% from these prices. they are caught however, bearish near-term on the rest of the commodities complex. they are bearish on oil prices. they are bearish and the soft commodity complex like coffee. most of these calls are based on weak demand for these products from china. rather, we have the week numbers out of the chinese economy early last week. they are pretty much bearish on all of the commodities. they are saying that gold may turn around. connell: thank you, sandra. let's turn to brian jacobson a busy day in the markets overall. it is always good to have you on, brian. let me start with what sandra identified. the goldman sachs turn on gold.

maybe we see the bottom. are they right about this? >> well, i do not think they are right about it. i do not view it as an investment. i view it as a spallation. i think a longer-term trend is for gold to be on the duke line. there are people calling for gold to go higher. short term, we could maybe see the european central bank ease a little bit more. eventually, that will come to an end. i do not think it is a trained eye would want to get on right now. connell: it could have some implications four other markets. for example, i have seen you writing about the fact we are riding a bull market for the u.s. dollar.

>> exactly. i would expect if the dollar will strengthen over the longer-term, gold should week. the federal reserve, despite the monetary easing, they were very close to and monetary easing. i think that from their perspective, the dollar could be on a very long-term uptrend now. connell: let's talk about what all of that means stocks. we are up 138-point and a big rally for the day. netflix and other companies have strong earnings. is there more to it than that? >> i think there are really two big forces at work.

there is a lot of pessimism already priced into the market. there is still expansion, but it has slowed down. it has not slowed down as much as a lot of people were fearing that it would. a lot of pessimism for economies. people are beginning to recognize that companies can save very profitable despite languishing economy did there is almost a divorce on how earnings and economies grow. connell: how does that environment sustain itself? >> is it sustainable in the long run, no. that means over a ten year cycle. i am focused over the next year or two years.

earnings can continue to grow because we see 20% of s&p 500 companies hoarding. only 45% have beat revenues. i think that we could be in a period of time where we have a divergence in the markets between those that are doing really well and those that are not doing really well at all. you could get a lot of disparities. connell: brian jacobson, wells fargo, thank you very much. appreciate it. >> thank you. dagen: rilling knowing about it through minor. connell: at&t versus google. we will tell you why. we will keep an eye on the market. a big day today.

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♪ dagen: we like good news. that is what the market is showing us today. nicole petallides if watching shares of coach. nicole: a couple of key names to show you. coach is known for its accessories. up about 9%.

they did raise their annual dividend by about $0.13. they had higher than expected quarterly results. they are expanding into asia. you are seeing it up about 9%. year to date, it is a winner. now in positive territory. i want to talk about rent a center. they had lower u.s. revenue. they are standing abroad. they said some of the lower income customers that they have, higher gasoline prices, delayed income checks are one of the reasons they did not see the numbers that they had hoped. back to you. dagen: thank you so much, local. connell: boeings 787 battery problems, there is one report

out think they could be back in the air as soon as next week. dagen: rich edson is live at reagan international. rich: they can't the certification out to the manufacturers because they do not have enough folks to certify these airplanes before they get on the timeline at the manufacturers are looking for. the battery maker in japan. the examination today is how can the results be so out of whack with what actually happened. they said there would be an event like this for the batteries that fire. what happened were two fires in about 52,000 flights. boeing says it is standing by its original certification process.

>> in condition number two, essentially saying that the battery has to be designed to completely eliminate the possibility of a thermal runway or is there some threshold that it could assert to incorporate that requirement? >> we use the word preclude to be that we would not expect this event to ever happen. in the safety, we would call that extremely improbable or not expected to happen in the life of the fleet. eighteen the changes they have made to these lithium ion batteries, the original failure rate, it is an appropriate your brave. we believe we have restored that design intent at this point in time. back to you. dagen: thank you. connell: apple driven by profits of the iphone. they are said to report tonight

after the bell. dagen: down 40% last fall. dagen: the president budget. take a look at how world currencies are doing against the greenback today. ♪ ♪

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♪ >> it is 23 minutes past the hour. israel is joining written and france and accusing syrian resident of using chemical weapons last month. based on visual evidence, he believes the legal nerve agent was probably used. rebels. a car bomb exploded outside the french embassy in tripoli this morning. two french guards were injured in that blast.

the tsa is delaying plans to let airline passengers carried pocket knives and some sporting equipment onto airplanes. it has been opposed by flight attendants, air marshals and some 9/11 family members. the delay will allow it to review the issue. back now to dagen and connell. connell: very nice. what a crazy story. i appreciated. moving right along. thank you. dagen: apple could make some history this afternoon. posting its biggest second-quarter sales. connell: what are the analysts participating? this is the big one tonight.

elizabeth macdonald joining us now. here is what they are watching for. >> i want to get to the sales numbers. we are looking for improved sales versus a year ago. the real story line here is that you are an improvement and iphones expected. improvement and iphones are expected. i want to get to the quick debate. peak apple. that is what we are looking at right now. is it a value trap or a bottom fish stock? apple is trading with the same pe as dell. it has three times, triple

google sales. apple guidance is below actual revenue. look at those numbers. their double digits there. it has made a downward revisions. it had lost $0.290 billion at the apple iphone5 was introduced. here is goldman sachs weighing in on apple they are expecting challenges. new products coming out in the second half of the year. also, lazard capital is saying the same thing. we do not know whether or not apple will say anything more about how it will use its cash for things like capital formation. we will be watching that. those are the numbers we are looking for from the street. back to you, dagen and connell. connell: it is amazing to see apple compared to some of these.

thank you, elizabeth. we will have full coverage of this later on. cheryl and dennis in the next part of markets now. they will look at $400 a share and whether that is the new normal. dagen: paying for the president's budget. if you are making more than $200,000 a year, you will be picking up a bit part of the debt. connell: on a big day for the markets, the s&p winners. netflix. that is the big story. look at that. ♪ why are 8 million people sleeping better tonight?

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dagen: the president's plan puts the biggest part of the tab on people making more than $200,000 a year. what else everybody else, though? they're in new york they want to stop the kids from smoking. tobacco companies could take another hit if the big apple raises the legal age to buy cigarettes. cyber war lost? at&t may be too late in the bid to take on google. connell: let's go to nicole now for another edition of "stocks now." >> i am watching travellers indeed and we're watching travellers moving here to new highs. bring you over to the post. check it out.

you can see it's up 2.25% right now at 86.51. certainly worth watching herement travellers came out with the first quarter number. they saw profit jumping. they've been raising prices. it easily beat the street expectations and there's another thing that we should note. fewer natural disasters which is good news. want only for travellers but also for some of the other guys. let's look at the insurance business altogether. look here. we have a.i.g. and chubb up for you. travellers at an all-time high. a.i.g. with an up arrow, up 4% and chubbs up as well. dagen: switching gears to president obama's budget and take a look at this statistic. 86% of tax increases will fall on people making $200,000 a year or more in 2015. this according to the new study by the tax policy center.

what to make of this? joining us is the senior political analyst for the washington examiner. michael, good to see you. i'm more interested in the fact that earners nearly every income level will bear some sort of tax increase in this which flies in the face behalf president obama promised years ago. >> when president obama was running for his first term, he said he wasn't going to raise taxes on ordinary people. that's actually been violated in a number of ways, including in the obama care law and early increase in the cigarette tax that tends to hit down scale people more often than it hits upscale people. but in the second term, he's putting in his budget these proposals to change, as i understand it, the c.p.i. that means that your bracket increases will go into effect earlier. people will be thrust into higher tax brackets and so-called buffett tax which

amounts to a sort of revival of the alternative minimum tax which congress finally fixed in the fiscal cliff legislation to try to get -- squeeze more money out of people with high incomes. dagen: do you think that it does raise the issue, if you look at some of the small tax increases on people making less than $200,000 a year, when you've got a nation staring at $17 trillion debt in the face, eventually everybody is going to have to pay more. are they not? >> well, if you -- you know, we have tax revenues running about 15%, 16% of g.d.p. in the recession and slow recovery period and that's well below the historic average that's up towards 18%. that's one of the things that happens when you have a progressive tax system as we do. president obama wants to make it more progressive if we continue to have slow growth, though, that's going to produce

disappointing revenues so, you know, the fact is that we wouldn't eliminate our current budget deficits even if we confiscated all the earnings of high earners above a certain amount. dagen: it becomes a vicious circle if you continue to raise taxes even on wealthier americans in the country. if growth slows, then the white house will want to spend more money and that's going to raise the deficit. then you look for more ways to raise revenue. one easy way around this would be -- maybe not easy but tax reform. it would make people's lives earlier in terms of filing taxes. given everything that's going on down in washington, and i think you referred to it as an unravelling in d.c., is that just completely off the table at this point? >> i don't think it's quite completely off the table. the kind of tax reform we had in 1986 where you eliminate tax references and you lower rates.

president obama has tended to be against lowering rates. he wants to raise rates on high income earners. but you've got an interesting situation now. senator, the chairman of the senate finance committee, the ranking democrat now since someone has announced he's not going to run for re-election in 2014. that gives him pretty much a free hand to try to fashion some kind of tax reform if he wants to do it in cooperation with the ranking republican on that committee. i think that it is within the realm of possibility that these two could do that. dave camp, the republican chairman of the house weighs and means committee has been working on the tax reform. we've seen on immigration, the president is leading from behind. he's the opposite of l.b.j. who insisted that congress pass his law without changing a comma. president obama doesn't have

much in the way of recommendations. so it's possible, i think, not likely but possible that we could see serious moves towards tax reform. dagen: keep hope alive. good to see you. thank you so much. be well. >> nice to see you. connell: there's a lot of talk in new york city today about the potential plan to raise the smoking age. the proposal would raise the age from 18 to 21. it wouldn't ban or they wouldn't prosecute people under 21 from smoking. they just wouldn't allow them to buy a pack of cigarettes. very early stages being thrown out by some of the local politicians but it's all over the papers and everything in new york. you might not be only losing your money at the slots. taking the scenic route from the airport in las vegas could also cost you. according to a legislative audit, vegas cab drivers overcharged their passengers almost $15 million last year. rides are meant to run up the

meter account for 23% of the airport trips in 2012. las vegas cabs have not been audited in 3 1/2 years. they'll be required to respond to the audit with a plan in july 17. hope. ly our friend warner wolf will be caught up with that situation. also a high tech version of an old style texas shootout. at&t and google are rolling out high speed internet service and doing so in austin, texas. google the first to announce the rollout in the city with at&t answering the call with its own offering. google has already done it and done it successfully in kansas city. both will offer the service in austin. analysts say google will take it all a step further and will offer free wi-fi across the city which is already planning to do in kansas city. both stocks are up today. dagen: new numbers out show

foreclosures are in decline. connell: talk about housing and also the red planet is closer than you may think if you want to take an ultra extended vacation. good for you. dagen: we're going to talk to chairman of the inspiration mark foundation. they're looking for a man and a woman to take a trip around mars. it would only be 501 days. do you think we could spend -- connell: we? first a look at treasuries. we'll be back with more "markets now" from space and everywhere else in a moment. ♪ [ male announcer ] this is karen and jeremiah. they don't know it yet, but they're gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money.

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connell: rate of foreclosures is declining. the total number of foreclosures falling below five million, first time since the crisis in housing began so anthony sanders joins us. good buddy of the show to talk about that and maybe some of the home sales numbers that came out today. what about foreclosures going down first, tony? >> well, that's not a surprise. we have kind of cleared a lot of problems that were occurring in the servicing industry. house prices are going up. income is not going up so much

but i think this is a generally good sign. connell: prices are going up. 3%, i think, fls the median increase in the last report we had this morning and the sales numbers went up in the month of march compared to the month before. you're already coming out thinking, not great, right? what do you mean? i'm reading your body language. >> we're at about 40% of the bubble levels. here is the disturbing news. although it's up 1 1/2%, about what analysts were expecting, median or average house price fell from 310 to 280 which is a huge decline in the average house price of new home sales. connell: so that concerns you. the debate right now, kind of the broaden out as much as we can, the big picture is are we in the midst of a sustained housing recovery? you say no. why? >> well, again, the credit is still very tight, although rates are at what, 3 1/2% for a 30-year fixed. we're just not seeing the action

that the fed was hoping for and again, incomes are not increasing. real household incomes are declimbing over time. we still have a lot of knots to work out. connell: people make more money and incomes go up and then they'll buy houses. is that the simple conclusion? >> that's pretty much it. the fed has bullets for the stock market but no bullets for the housing market. connell: thanks. >> thanks, connell. dagen: let's take a look at shares of net flix. again, we like good news. look how much they're up today. that after the company blew away earnings expectations. there was strong subscriber growth for streaming video service. based on one measure, it even has more subscribers now than h.b.o. what to make of this. jonathan is the senior managing partner. you know, aren't investors supposed to be smarter than

this? couldn't they see that with the showcase of cars with kevin spacey that everybody was addicted to? >> i don't know if it's catching people by surprise. investors that did see it were already owners of the stock. we have two things happening here now. we have the snow ball effect that people are getting in now and then we've got investors have have been there all along who are adding to their positions here. clearly what we see coming out of net flix across the board, blowing away stims, very strong guidance and look at everything coming together here. as you said before, more subscribers than h.b.o. you talk to the younger generation now, you talk to college kids, they don't have tvs in the dorms. everybody watches their news and movies on line so it's really starting to morph the way people view entertainment on tv now. dagen: are there any other -- because this is a company that was a stock that was really left for dead. people didn't think it was going

out of business but at one point it felt like a blackberry, if you will. is there any other stock that you could throw in the camp that people might be overlooking and writing off when they could have something working in their favor potentially? >> i don't think there's a particular stock that is out there right now but what i think you're going to see is some of the motion picture industry, the broadcasting companies start spinning off and starting to do this on their own. the way people are watching tv is clearly changing and i think everybody will have to jump along. from an industrywide, i don't think we're going to have particular public companies that are there now doing this but what you're going to see is everybody start changing some business models to conform to this type of entertainment. dagen: thank you so much. be well. connell: we all have to picture this. 501 days living in a castle the size of an r.v. for an out of this world adventure. it could be all yours. dagen is interested in taking

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dagen: this is a romantic vacation. yes or no? inspiration mars is searching for one couple, a man and a woman, to make a 501-day trip to

mars and back on a space capsule smaller than an r.v. joining us is the chairman of the inspiration mars foundation. dennis, god good to see you. you might be known as the founder of wilshire associates so you've worn many hats over the years. why do this? >> well, i think it's a big step for humanity and it will be our first encounter with mars. mars is probably the only other planet in the solar system that humans could inhabit so the crew will actually act as ambassadors from earth. dagen: in terms of humanity, though, what about -- what can you -- just based on this one trip, what will you learn about the science? what kind of contributions would this one trip make to the way we live our daily lives? >> i think we'll learn more

about life sciences, how humans behave in deep space and how to deal with psychological issues of isolation. i think we'll learn a lot. don: you're shooting for 2018 for this voyage. do you have the technology in place to get it done? >> the technology definitely exists. it's just a matter of engineering and program management to get it together. it's not a very complicated mission. dagen: what about interest so far from people who want to take the trip? what have you heard at this point? >> well, it's too early for us to start taking applications but we've received a lot of emails, a lot of interest on the part of different individuals but mainly couples who think they get along well enough that they could survive 501 days together.

dagen: you don't want to do it? >> no. i've had my trip to space and i don't think i would be able to get along with someone for that length of time. dagen: at least you're honest about it. do you worry about the budget constraints that the government will be facing in years to come with the deficits that we have and what that will do to our space program? what it's already done to our space program? >> i don't really worry about it. i think our space program will be supported by the public if we do interesting things. and one of the reasons we're engaging in this project is to inspire our youth and our public to be more interested in space flight. dagen: one last thing. since you're the founder of wilshire associates, how is your money invested these days? >> well, we favor broad diversification and favor a lot

of indexing or managers that can track the markets with high degree of diversification. dagen: it was good to see you. thank you so much. keep us posted on interest from couples and connell and i can explain to them that might not be wise for them to be stuck 501 days. connell and i can barely make it 55 minutes. thank you so much. connell: 501 days. i was trying to think during that interview, who could even imagine standing it for that long? dagen: i would be heavily sedated. the person with me would have to be heavily sedated. connell: don imus could be one possible. i'm not sure that would work out or not for a long time. speaking of net flix, shares are streaming higher today. see what it means. it's a streaming service. streaming higher like it's a verb. dagen: i got it. i'm ignoring you.

connell: look at this. huge 40 bucks. dennis and cheryl will talk more about whether net flix can keep it up. dagen: we take the iphone apart and analyze how much apple makes on each one. for seeing your business in a whole new way. for seeing what cash is coming in and going out... so you can understand every angle of your cash flow- last week, this month, and even next year. for seei your business's cash flow like never before, introducing cash flow insight powered by pnc cfo. a suite of online tools that lets you turn insight into action.

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why are 8 million people they went to a sleep number store. thonly place in the world you'll find the sleep number bed. a bed with dual air technology that allows you to adjust to the support your body needs. each of your bodies. the only place you'll find our bed-clinically proven to help each of you sleep more soundly. and the only place you'll find sleep professionals that will help you find a number that will change your life. your sleep number setting. you won't find any of these innovations in an ordinary mattress store. you'll only find sleep number at one of our over 400 stores nationwide. and now you can save $400 on the only memory foam bed with sleep number technology that adjusts to each of you. plus special financing on all beds. don't just change your bed. change your life. at only one place: a sleep number store. where queen mattresses start at just $699. sleep number. comfort. individualized. to find your store, visit sleep number.com.

but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. cheryl: good morning, everyone. dennis: as the bulls charge up wall street and netflix shares push it higher, that rally making the stock the best performer for the year and we have an analyst on a head on

whether netflix can keep it up. cheryl: apple gained 2% yesterday. take a look at it right now. it's higher by almost 2%. are bull-bear debate ahead and we'll take you in the anatomy of the iphone. dennis: and the cyber threat. chinese hackers blamed again for high speed businesses and we have the verizon author of a startling new report joining me in moments. first stocks now every 15 minutes. nicole at the floor of the new york stock exchange. rally, baby. >> rally, baby. i always take a look at the highs of the day right before i go on and it was 14,719 which is exactly where we are at this moment. first thing i thought of is wow, we're getting close to the 15,000 mark once again after the big selloff last week. they were down 2.2%. we had a tough week for many reasons, obviously, but now it's back to the bulls. we're seeing the momentum and despite some tough economic news and some tough news abroad, we're still maintaining up

arrows here in a big way, in a broad based way. retailers up arrows. in some cases, all-time highs so it's certainly a day for the bulls here in the thick of the earning season. cheryl: and it's a good mix of names from several sectors so the rally is broad based. thank you very much. we'll see you in 14 minutes from now. all right. home builders, trading higher for a second day after new home sales jumped 1 1/2% in march, reversing february 7 1/2% sales plunge. next guest says right now home builder stocks are the sector everyone should be watching. chris is the investment chairman with me now. chris, you say this is the sector that could show the cracks first as investors are losing faith in the economy. we're not seeing the cracks today. what do you say? >> correct. market acts very strong and the amount of resiliency it's showing in the face of moderate

news the last week and a half or so is good to see how much money is flowing in the market. the home builders are participating in that. the key is the only real chance this economy has to get out of the funk we're in is with the housing recovery. if you start to see the stocks weaken, the people are starting to doubt whether the recovery is real or not. cheryl: a couple of things here happening in the sector that i want to move on to other market thoughts with you. barkley's taking a few big names and actually giving them upgrades. so barkley's is seeing something in the names. we continue to see the build in home builders, what is that saying about the overall market? is it going to have further to trend higher? >> i think it's possible. the key is whether or not the home builders can sustain the growth they've seen. they're coming off such low levels as far as their

profitability and obviously revenue growth. that's a very good, encouraging sign to see the way they're acting and that potentially can continue to build. the question is, can the rest of the economy follow along? that's why the home builders will be a leading indicator to us. if they do continue to rally, this market can probably continue to rally. if they start to weaken, you look at that as the canary in the coal mine. cheryl: you also have other canaries that you're playing with right now. in your short treasuries, i think it's interesting right now, you also say that a lot of your clients, you're moving them into cash right now. you're looking at a heavier cash position. you're defensive here. why? >> very simple. because valuation is getting stretched. we're traditional investors. as things get more expensive, we tend to sell them. when they get cheaper, we tend to buy them. we're seeing as stocks hit our price targets, in many cases targets that we had two or three years out, they're hitting the price targets now. we don't have something we feel

is ready to buy. we have more cash today than we had in the middle, early part of 2008. simply because it's really hard to find compelling, good risk reward scenarios in the market because valuations are beginning to get stretched. dagen: you're looking at the major markets in one way and being cautious with cash. on the other side, you're starting to nibble on the gold and silver, mining stocks. why that particular group? we've seen incredible losses in gold in particular, silver has somewhat been following suit but you're saying go for the miners. why? >> in our particular case we're very old fashioned. when things get hit hard, we start to get very interested and in the case of the gold miners and the case of the silver miners, et cetera, we see valuations off 50%, 80% in some cases and there's tremendous value in the core businesses we believe is not being appreciated by the market. we're just getting started with this position and we would love it if these stocks would drop

20% or 30% more from here so we can acquire more of them. but when you look out two years, three years, we think these can double or triple from current levels. cheryl: before i let you go, are we getting complacent, do you think, with all the big rallies we've had? >> absolutely. connell: why do you say that? >> people have just forgotten all the drujry and pain and misery we had in 2008. because of the fact they're not getting paid anything on their cash, they're simply willing to take risks because there's no other place to go. that is a recipe that hurt us badly in 2008. if people are not careful, it's going to bite them in the tail again. they have to start respecting risk more than they do now and that's why as stocks get more expensive, we're becoming more cautious. cheryl: it's going to bite them somewhere if the rally doesn't hold in a few sessions. thank you, christopher. good to have you on the show again. >> thank you very much.

dennis: the cyber threat. a new report from ver sgln says cyber attacks are a pandemic and china gets a lot of blame. verizon's data breach report argues china may be behind 96% of state sponsored attacks and we have one of the authors, wade baker. thanks for being with us. so your report finds one thing is a state sponsored break-ins in the past year were up triple. what portion of all hacker break-ins are now state sponsored instead of rogues on their own? >> in our study, about 20% were state sponsored and most of those came from china so it's a pretty large segment when you consider all those crimes going on today. dennis: we have one chart here saying cyber attack origins and it shows that china is pegged with 30% of break-ins. romania with 20%. romania doing financial while china doing espionage.

please explain the difference there. >> so when you look at the attacks, you really see the differences in the kind of attacks so we call it financially motivated attacks. a lot of them are operated out of eastern europe. they target payment cards, personal information for fraud. they use a completely different set of tactics than your espionage side which is largely operated out of china but other areas of the world as well and they use different methods and moans and target military secrets, very different types of crime. that's why in the report we draw the distinction between the two. dennis: others have come on air and said if the chinese were go good hackers, you wouldn't be able to trace them to begin with. are they being framed? >> no. i don't think so. but there is a certain degree of truth there. in other words, we are getting better at recognizing those kinds of attacks. one of the main reasons we saw such an increase in our report

this year is because of the amount of intelligence and information that is shared about the attacks that increased our ability to recognize and respond to them. there is a certain degree if they are good, we'll hide and not notice them. dennis: you counted 621 breaches including 44 million records. that's down from 855 and 174 million records the year before but the fact is, you really don't know how much of this stuff is really going on, right? are you getting 90% of what you see, only 10% of actual activity? >> i really wish we knew the answer to the question but the fact is that every year we work with a larger set of organizations in order to try to answer that question. but it's really difficult to know because so many attacks are unknown and the victims never know they've been attacked. so there's a huge number of events that are going on day in and day out. and we see a proportion of that but we try to get as much as we can to really figure out what's going on across what we don't

see. dennis: if we're finding this much, we're probably stopping a lot less. thanks for being with us. >> i really appreciate it. cheryl: some new developments today in the dream liner debacle. dream liner 787 problems the subject of a hearing right now. rich is monitoring the hearing from washington's reagan national airport and the chief engineer, rich, getting grilled today. >> absolutely. and what the company is saying and what the government is saying is right now it's unclear, whether the problems were the battery designs or the manufacturing. they say there's not enough information to determine what precisely caused the battery fires but this investigation is going beyond that. this is looking at the f.a.a. pros for certifying airplanes. the way it works now is the f.a.a. does rely on the manufacturer because they want to get the planes certified in a timely manner. what the original process found with the battery, maybe it could catch on fire once every 10

million flight hours. what happened were two fires in 52,000 flight hours. since then the battery has been resigned and the company is saying and the government is saying that redesigned battery should be just fine. take a listen. >> we believe that the work that was done on the original battery, that that failure rate was an appropriate failure rate and we believe that we've restored that design intent at this point. >> it's still concerning there's no root cause yet discovered by the company or the government as to why the batteries caught fire. one in the air by japan and the other at boston's logan airport. as for the logan fire, the f.a.a. was asked whether or not there could have been a problem if the plane was in the air and they say they don't know how to make the judgment on that because the plane was on the ground. there were certain systems that were off because the plane was on the ground. the investigation continues. two-day hearing while boeing is

reinstalling the battery up in the airplanes to get the planes up in the air as quickly as possible. cheryl: i couldn't believe it when he said earlier, we never thought it could catch on fire. that was never a possibility. guess what? it happened. great stuff out of washington. thank you. dennis: and netflix is now the best performer for the year in the entire s&p 500. we've got an analyst ahead on whether the company can keep it up. cheryl: deconstructing the iphone. you'll want to stick around. we take an iphone five apart and analyze how much apple makes on each opponent. as we go to break, every time we do at this time, take a look at the oil contract below 90 again. you hurt my feelings, todd.

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cheryl: dow hitting 52 week or multi year high today. disney, coke, even merck and verizon, even travellers. all of these names 15 minutes. nicole is on the floor of the new york stock exchange looking at yum brands. are we talking lunchtime and taco bell? >> we'll take a look here at yum brands. it's a sea of green and yum brands is to the down side again and that's really the story that we're following here. down 2 1/2% at 63.66. year to date it's down 4%. they've been plagued by all kinds of headlines and issues pertaining to k.f.c. they have k.f.c., taco bell and pizza hut. what we're looking at is k.f.c. and restaurants in china. the overhang on yum brands and that's the bird flu issues as well as some reports that some of the suppliers were given

chickens unapproved levels of antiobiotics. these two things have hurt the sale of yum brands over in china in particular. k.f.c. was in china, was a huge revenue generator for them. it will be interesting to see. when they report after the closing bell today, we'll see what we hear. cheryl: that will be a busy hour on fox business. thank you very much. dennis: it's time to make some money with charles payne. he has two companies he's covering, due pobt -- dupont and netflix. >> i have to tell you one of my themes for investing has been the global recovery. a lot of the earnings today, let's start with dupont. they beat the street by four cents. that's a strong percentage gain there. take a look at geographical reports for the company. phenomenal. america, they saw the 8% change of revenue in the top line. the line i want you to look at is in the middle.

pricing. that's pricing power. they have pricing power in america, europe, middle east and africa and also latin america. not in asia. pricing power is where you begin on the income state many. when you have pricing power, that's when you get margin expansion and with that comes stocks higher. also we should know if they're going to put this type of pricing power in a domestic economy, it means it's being absorbed. that is a great sign. that really is a great sign. travellers sort of the same thing. this is the great quarter for travellers, one of the best they've had in a long time. the stock is obviously doing extraordinarily well and they saw the same thing, up almost two bucks. all their business segments. take a look at this chart. they have three major business segments. business, personal and financial. all higher. significantly higher was personal. also with that came premium renewal. again, the ability to pass on price increases is really the ultimate thing if you're a business. it's one thing to grow through

volume, through discounting. robust margins equal a great stock. dennis: two companies, one in chemicals and one in finance. both have power to raise prices over the longer term. does that not worry you about en nation in the u.s.? >> they're putting in prices but, you know, by the waway, dupont is much more agricultural now. they sent the car painting business so they're not the chemical company we thought they were. more nutritional and agricultural but i think the inflation argument, even though we feel it more than the federal reserve thinks we do, i don't think it's plagued us yet. cheryl: both names in the top five today, dupont and travellers. do you wait for a pull back before you buy them? >> again, i just think the average investor, and i talked to so many, i have about 170,000

in the data base. they aren't good at picking bottom stuff. to be quite frank with you, when the bottom comes and we're all afraid, we head for the hills. very few people pick the bottom. dennis: a raul value is a value. cheryl: i've done real estate once correctly in my lifetime. what does that a? everybody has different investment objectives,

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>> it's now 23 minutes past the hour. i have your fox news minute. two senators are urging the obama administration to delay for at least 30 days the f.a.a. furloughs of air traffic

controllers. one from connecticut and the other from kansas say they're causing turmoil for thousands of travellers as well as security concerns. t.s.a. is delaying plans to let airline passengers carry pocket knives, and some sporting equipment on airlines. the policy change was to begin on thursday but it was opposed by flight attendants, air marshals and some 9/11 family members. t.s.a. said the delay will allow it to review the issue. max boccus will not seek re-election in 2014. he served six terms in the u.s. senate. that's 36 years. democrats will now be defending open senate seats in six states next year. imagine that. he's served longer than you've been alive. those are the headlines. cheryl: it's cheryl. it's been -- hello, lady. it's been an entertaining 36

years. >> you're a lot younger than 36. that's for sure. cheryl: yeah. love a. thank you. het you are -- heather from the news room, thank you. 19-year-old boston suspect dzhokhar tsarnaev facing charges that could potentially result in the death penalty and new details after a court hearing took place in his hospital room. fox is outside of beth israel's medical center in boston with the latest. >> hi, cheryl. this information coming from an affidavit of a top f.b.i. official, giving a lot of details about the evidence that authorities believe they have. they say they have video that reveals the two suspects that they say are involved in the boston marathon bombing showed up to the scene, walking out of this video footage about 11 minutes before both of those bombs went off. both of the men were carrying large knapsacks according to the paperwork and they detached from the crowd, repositioned and bomber two, dzhokhar tsarnaev, the man in custody now, the man here in the hospital, is seen

slipping his knapsack on to the ground precisely what this agent writes, approximately 30 seconds before the first explosion he lifts his phone to his ear as if he's speaking on his cell phone and keeps it there for approximately 18 seconds. a few seconds after he finishes the call, the large crowd of people around him can be seen reacting to the first explosion. virtually every head turns to the east, towards the finish line and stares in that direction in apparent bewilderment and alarm. bomber two, virtually alone among the individuals in front of the restaurant, appears calm. this is just one of the reasons that these two men came to the attention of authorities, one of the reasons they zoomed in on these two individuals on the videotape. the paperwork goes on to say that he glances to the east and then calmly but rapidly begins moving to the west away from the direction of the finish line. he walks away without his knapsack, having left it on the ground where he had been

standing. approximately 10 seconds later, an explosion occurs in the location where bomber two had placed his knapsack. and there were many more details revealed throughout this paperwork. some of it under a heading to say bombers emerge. now, this happened after the photos are released, after these video images are released. the suspects are alleged to have then tried to escape. carjacking a man in cambridge. the victim tells authorities that a man approached his vehicle, taps on the passenger side window examine now, quoting from the documents, when the victim rolled down the window, the man reached in, opened the door and entered the victim's vehicle. the man pointed a firearm at the victim and stated, did you hear about the boston explosion? and i did that. the man removed the magazine from his gun and showed the victim it had a bullet in it and reinserted the may go zone. the man then stated, i am serious. incredibly this carjacking victim survived to tell his story, to tell authorities his story and to give them more

information that they need as they pursue this case. his vehicle, however, i might add, we did get a chance to see that as it was taken from the scene as evidence. very beat up. windows blown up, bullet holes down the side of it, clearly involved in a very dangerous shootout. cheryl: molly, in the video we were looking at a darkened piece of video. that was the chase they had in the middle of the night. everything on tape from this story. it's been fascinating to follow. thank you very much for that live report from boston. >> thanks, cheryl. dennis: examine next hour, a vote of confidence and big check. starcom president joins melissa and lori on the ad deal with the twitter. cheryl: with the twitter. there you go. shares of apple went from $700 to $400 in the blink of an eye. our bull bear debate on apple earnings is coming up. dennis: can netflix keep up the mo? they stopped the s&p 500 for the year as the best gainer. let's take a look at other s&p

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wall street. radioshack, interestingly enough, the ceo is promising change. i will not leave out texas instruments. up 3%. back to you. cheryl: profit is always on wall street. the key today will be the sales of this. it is the iphone. brand new technology.

the anatomy of the iphone5. let's look at that a six processor. this is a big component. the cost to apple, as you can see, $17.53. in other stock you want to watch after the file. it is qualcomm. also want to show you the battery. again, sony. it is another component. then i want to go down to the flash drive. again, flash.

this is very important and very expensive. sandisk. another stock you want to watch towards the end of the day. i also want to show you something else. this is where the numbers get really interesting. take a look at this. if you add up all the component costs, $200. the estimate that we have is $442. that is the profit for a name like apple. we have our debate right now. just how important you think the product sales numbers are going to be in the report after the bell today? >> the most important thing we will be watching is the gross margin figures.

38% was the critical it. anything on the gross badge margin, i think that favors the bulls. >> i think the numbers could be slightly below that. you will look up three or four years and that will turn into $200. there are a million guys out there that will make it everybody that it is a commodity product. it is a hardware product.

this is no different than any other technology product. the biggest customers, that comes out of their pocket. they are the ones that are subsidizing it. cheryl: one of the things that many analysts say, they need to come up with new product. how long before we get the new products that you are looking for when i tell you what, they better say something today. to hear the same story about innovation has never been out better, that will not cut it. that is an easy place for them to go.

cheryl: do you think the ipad mini will damage the sales? >> we are all going to find out today whether that impacts gross margins are not. we do not know yet. >> everybody is talking about the market expanding. they think it will go to 40 and $50. when the core product that represents 50, 60, 70% of your profit starts to disappear, the earnings will go from 40 to 30.

this quarter is already out of the bag. we talk about myths, we talk about not just this quarter, but the june quarter. we will introduce guidance that we've lowered the industry. i recognize what will happen. this summer's introduction will not change anything. cheryl: gentlemen, thank you to both of you. we will what happens tonight. >> thank you. dennis: that was really fun. netflix is rivaling hbo. is it a fight even after roaring up over 20% today? cheryl: if you are planning to

fly to las vegas anytime soon, why you need to watch the 10-meter when you grab a cab at the airport. my first guest today is sure of the treasury. we will be right back. double @

♪ >> i tracy byrnes with new fox

business brief. stocks are in rally mode. right now the dow is up about 130 points. traders are placing their bets on caesars entertainment. they announced a new growth venture. power management plan to invest $250 million in the new venture called caesars growth partners. i know you cannot wait for the return of some of your favorite hostess cakes. they are planning to launch up to eight hostess products in the next two months. that is your news. that is the latest from the fox business network. giving you the power to prosper. ♪

dennis: netflix shares streaming higher today. it is the best performer of the s&p 500 for all 2013. that is following yesterday's report. we are joined by michael olson. take a look at this quote from an netflix chief content officer. he says the goal is -- sack i think they are definitely succeeding. they have into a position where they have a lot of great content. some of it is nonexclusive. they continue to go down this route i think that is when you will see the subscribers having or perceived service.

dennis: what is your price target? would you tell your mom to buy the stock after it rose $43 today? >> our price target is 194. if you look at how to get there and looked at the valuation that if you think out to 2015, you have to assume a 40 to 50 multiple earnings number. to get to that number, you have to assume they will have 17 million international subs. there is the aggressive numbers that you have to put in place. like i said, there is no question that they continue to dominate. the numbers are on the state, but they are also possible.

dennis: hbo keeps comparing themselves. >> i think is some concern. to what degree can they continue to grow. right now, the cash flow is negative task order. i think that will alleviate some of the concerns that people have. dennis: i think you'll drafted there. nice job. we will watch that stock.

thank you very much. >> thank you. cheryl: las vegas cabbies have been taking tourist on a ride. vegas cab drivers overcharge customers heading to the strip and downtown almost $15 million in a year. that is according to regulators. the taxicab already has until july 14 to respond to this report. the concern is called transport her to street traffic, human health and the environment. supporters have standard coal train traffic in washington. this creates jobs not say. 5755. that is the one year.

los angeles will be one of ten cities globally to host an all electric vehicle race series. it would be in downtown late and could have been sometime next year. miami, rome, london and beijing also set to host those races. that is your west coast minute. dennis: it is a quarter tiller so. we have stocks every 15 minutes. >> i think we will continue to see this rally. let's back up a little bit and figure out what is happening here. earnings season clearly is helping where we are right now.

it get to route a little bit. as for now, no major headlines will shake our market or stroke our market at this point. we have full after the bell today. dennis: thank you very much. gas prices down as oil pushes lower. smith ahead at the cme on how you can make money on that. cheryl: take a look at some of the winners over on the nasdaq. the nasdaq and the s&p are falling. we will be right back. ♪

dennis: oil is heading back down after a three-day winning streak. sarah smith. sandra: oil is down about $0.15. we are watching his energy aid because oil has been up for three straight days. that is continuing today. goldman sachs coming out saying they are actually perish. they are downgrading their the term outlook. a 22 year high. gasoline futures, as a result,

down a full present in today's trading session. if you are looking for the green arrows right now, that is in natural gas. they are the best performer ms. cme right now. there is a lot of speculation that there will be a growing supply deficit. we have inventory out on thursday. the speculation we will see a smaller than normal increase. gas futures up 28% so far this year. that bullish trade continues today. cheryl: brown rice, tofu and out margaritas at schiphol they ran.

it will cost between 650 and eight dollars. again, another reason that will probably -- dennis: i don't know why they don't pushed out more. imagine if donald sold beer. new momentum for twitter. they have a big commitment from a big ad buyer. on the rich men will melissa and lori on that big deal. cheryl: braving the airport. some choice words for the faa.

melissa francis and lori rothman will take you through the next hour of market now. stay with us.so ♪ w- last week, this month, and even next year. for seeing your business's cash flow like never before, introducing cash flow insight powered by pnc cfo. a suite of online tools that lets you turn insight into action.

♪ dennis: let's talk a quick note on netflix and apple. six months ago it felt like netflix could do nothing right and apple could do no wrong. we are watching apple for earnings after the bell to see whether they stumble yet again. cheryl: a lot of big will be coming out after the valve. melissa: huge market they are. welcome. i am melissa francis. lori: we will set you up. i am lori rothman. head